Are city elected officials being outmaneuvered, outsmarted and scammed by Nor’wood Development Group as the extensively reworked Banning Lewis Ranch annexation agreement moves briskly along to almost certain council approval? I don’t think so, and I’ve been involved with this issue for 30 years. In writing this column, I’ve consulted a developer-autographed hardbound copy of the original Banning Lewis Master Plan, dated April 20, 1987, as well as notes and documents dating from my time as a city councilor during the 1990s.
Here’s what Frank Aries, the original would-be developer of Banning Lewis, said in the preface to the plan.
“The size and dynamics of the property distinguish it from most other development undertakings, not only in Colorado but the United States.”
Colorado Springs, rejoice! You’re not in Kansas any more.
It was all for naught. The deal depended upon constant infusions of cash from a soon-to-be insolvent Savings & Loan. The scandal-ridden S&L industry collapsed nationwide, Aries’ company went bankrupt, the Feds took over the property and Colorado Springs was unofficially dubbed “the foreclosure capital of America.” The ranch remained undeveloped, passing through multiple owners until Nor’wood finally picked it up, though Ultra Petroleum still holds the mineral rights.
So here we are in 2018 with a giant chunk of vacant land on the city’s eastern border, a dubious 1988 annexation agreement, and a solvent local developer working with the city to craft a new one.
At a special council work session Monday, Planning Director Ryan Tefertiller noted that the 21,325-acre ranch had seen little development during the last three decades.
Tefertiller explained how onerous the 1988 annexation agreement was for any would-be developer. It requires the developer to build a multi-lane freeway through the ranch on a 300-foot right of way, pay for a centralized wastewater plant, build four police substations and put “hard zoning” in place throughout the ranch. It established off-site roadway and urban extension fees totaling 50 cents per square foot of building area, and required that infrastructure be sized to accommodate an eventual ranch population of 180,000.
Why would anybody build there, given that building in the county was cheaper, easier and vastly more profitable? Nobody did.
“Falcon exists only because of this annexation agreement,” Councilor Andy Pico observed at the meeting. “Sprawl is the free market at work. We need to bring tax dollars back into the city.”
Colorado Springs Chief of Staff Jeff Greene said, “We’re losing millions of dollars in taxes because of development in the county.”
So why did the ranch get stuck with such an unworkable plan? Tefertiller attributed it to concerns among residents, elected officials and city staff about development paying for itself, coupled with the fact that the western edge of the ranch was two miles away from any developed portion of the city.
That’s true, but why did Frank Aries spend millions on getting the ranch annexed? Any developer nowadays would walk away from the deal — but Aries was playing by different rules.
Why would anybody build there, given that building in the county was cheaper, easier and vastly more profitable?
He didn’t have a nickel of his own in the project. All of it came from the S&L. Successful developers such as Aries could tap the lightly regulated S&L industry for almost unlimited funds. Interest could be capitalized, S&L officers could be given a piece of the action and if some deals didn’t work out, so what? There were ways of skimming off a few bucks along the way, and S&L depositors didn’t care, since their deposits were fully insured by a federal agency.
To keep the money flowing from the S&L, Aries had to get the ranch annexed and master-planned — otherwise it was just another piece of high-plains dirt. The deficiencies of the plan didn’t bother him — he just wanted to keep the ball rolling, and have a halfway credible course that would allow the deal to move forward. And who knows, he may have even believed his own fanciful claims.
We’ll never know. Many of the principal actors in the process are deceased (Aries, then-Mayor Bob Isaac) and others left the area decades ago. And now it’s déjà vu all over again, as suspicious local activists consider the new plan. Paraphrasing Yeats, “And what rough beast, its hour come round at last, slouches towards Council to be born?”